business choices Flashcards
1
Q
when are business choices made?
A
- resources are scarce or limited
- decision are made under circumstances of uncertainty
2
Q
what resources may be scarce that forces businesses to make a choice on how they are used?
A
- finance
- time
- capacity
- skills and capabilities
3
Q
what is opportunity cost?
A
measures the cost of a choice made in terms of the next best alternative foregone or sacrificed
4
Q
examples of opportunity cost
A
- work leisure choices - not to work an extra 10 hours a week
- government spending priorities - the government spending an extra £10 million on NHS but that’s 10 m less for the education sector
- investing today for consumption tomorrow
5
Q
what is a trade-off?
A
a trade-off arises where having more of one thing potentially results in having less of the other
